Report – 38 Studios and Big Huge closure imminent

Kotaku is reporting a rumor that troubled development house 38 Studios is laying off its entire staff, and closing down Big Huge Games.

Notices, missed payroll, cancelled benefits

According to a source speaking with the site, employees knew things were going south as early as April.

“38 Studios just laid off its entire staff, both Providence and BHG studios are being shuttered. We have not received a paycheck since April 30,” said the source. “On May 15, we found out we were not getting paid when our checks did not hit our accounts. Our medical insurance runs out tonight at midnight. We found this out when an employee’s pregnant wife was told by her doctor, this was on Tuesday the 22nd May this week.

“In my conversations today, there were no discussions about layoffs. We were just not given that confidence.”

“The company has not communicated anything concrete to the team throughout this process, leaving team members to figure out insurance stop-gaps (where people could afford it), etc. on their own.”

Meanwhile, a source familiar with the matter, has told Polygon 38 Studios laid-off remaining staff today, after the first round of lay-offs hit Tuesday.

An email sent to staff members, and forwarded to Gamasutra, stated the following: “The Company is experiencing an economic downturn. To avoid further losses and possibility of retrenchment, the Company has decided that a companywide lay off is absolutely necessary. These layoffs are non-voluntary and non-disciplinary.

CEO Jen MacLean and SVP of product development John Blakely are also no longer with 38 Studios as of yesterday.

38 Studios has been in the news almost daily since it tripped up on its first loan payment pf $1.25 million to the state of Rhode Island. The first check reportedly bounced, but a second one issued cleared the bank.

Today, it was announced Helena Foulkes, the vice chair of the Rhode Island Economic Development Corporation which loaded the firm the $75 million to move to the state, has resigned.

Big Huge Games was on the verge of shuttering before 38 Studios purchased the firm two years ago, when baseball legend Curt Schilling purchased the developer.

Its Kingdoms of Amalur: Reckoning action-RPG, was meant to give gamers a taste of what was to come with its Copernicus MMO – assets of which started trickling out this week.

“We gave them the million. They did not give us the tax credits, which would’ve not only payed the employees, but saved the studio most likely as we had several publishing deals in the works. The government flat out lied to us (big surprise).”

“The game failed”

During a press conference held this evening, Rhode Island governor Lincoln Chafee said he had no confirmation of the lay-offs or knowledge of whether the studios had indeed shuttered. He said he had reached out to the company, but discussions regarding lay-offs had not occurred.

“In my conversations today, there were no discussions about layoffs,” he said, adding that if so, the firm and the state were both facing “grim times.”

“We were just not given that confidence,” Chafee told the press. “It’s not a good situation. I’m not here to share good news.”

The governor said the Reckoning’s 1.2 million in unit sales was a failure, citing the need for the game to sell 3 million units in order for 38 Studios to break even, according to “experts” speaking with his office.

“The game failed,” Chafee said. “That was integral to the success of the company.”

State lawmakers have called on Chafee and the RIEDC “to immediately release all records related to 38 Studios’ financial situation and its $75 million loan guarantee.”

Coverage on the entire matter, as well as PDF files regarding the loan to 38 Studios can be found over on WPRI.

“We even had buyers lined up for the credits and the government was sitting there telling us: ‘You give us the million, we give you the tax credits,’” he wrote.

“We gave them the million. They did not give us the tax credits, which would’ve not only payed the employees, but saved the studio most likely as we had several publishing deals in the works. The government flat out lied to us (big surprise).”

Cortis said he didn’t fault upper-management “too much,” as it had been “open about what’s going on,” but he said the higher ups thought the studio was going to “pull through this.”

“I’m sure the full story will eventually come out,” he said.

As of press time, neither 38 Studios, the Rhode Island Economic Development Corporation, nor Big Huge Games have responded to requests from the gaming press.

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This is quite sad. I just recently played the demo and I was impressed by how much fun I had, in fact I’m probably gonna go out and get it soon. But they needed to sell 3 million copies on a new IP to break even?? This reminds me of the whole LA Noire fiasco. It really is a gamble when starting a new IP, but setting your goals at millions of copies sold isn’t really the way to start.

“The governor said the Reckoning’s 1.2 million in unit sales was a failure, citing the need for the game to sell 3 million units in order for 38 Studios to break even, according to “experts” speaking with his office.”

And yet people people bitch and whine for better and better and better and better graphics, again and again and again, completely uninterested in the financial burden such overbearing visual snobbery puts on developers.

A game should not need to sell 3 million copies to break even. That’s just ridiculous. And it’s just going to get even more expensive in the next console generation.

@6 – While I agree with your point, I’m not sure it has any relevance to this story.

I think its safe to say the high cost of developing KOA stemmed from building everything – from the studio to the IP – from the ground up. Had KOA went on to sell 3 million copies, I’d wager KOA2 would have cost half as much to develop.

Either way, terribly sad to see. I loved everything about this game! I hope all those devs find work elsewhere.

What some of you are missing is that it was the gov of RI who said “experts” told him the game would need to sell 3 million to break even. 38/EA/BHB weren’t the ones who said it. What these “experts” failed to convey to him was that 1.2 odd million is rather excellent for a new IP. Granted he kept going on and on in the press conference that the games industry is a harsh business, but still, it would have been nice if these experts had been named.

I jumped on it during the Steam sale, and it really doesn’t look very good. It looks like a higher polygon count WoW.

I really don’t see how this wasn’t entirely their own fault. Just look at the basic design decisions. I’ve played for 10+ hours, I’m STILL in the starting areas, and I feel like I’ve gotten absolutely nowhere in terms of advancing any kind of story, or really engaging with the world.

I finished Arkham City in 11 hours, and I loved every minute.

I mean – screw graphics – was it really neccessary to make a game world the actual size of Brazil?

To me it just screams rookie mistake, and that’s not because I don’t like the studio, or even the game, but there were several ways they could’ve prevented this, or at the very least limited their exposure in case of a loss – The primary one being to not make a gargantuan game as their first effort.

It stands to reason that a new studio won’t be a well oiled machine, and it won’t have the kind of efficient pipeline that you’d need to put this together without a huge amount of wasted effort.

For a lot of people that’s a huge plus point in a game like this though. I do agree that the structure is such that it’s very easy to get lots of side-quests and lose track of the main story. Though that’s a choice you make, the main quest line is easily followed if you want to go that route too.

I agree with Ireland Michael and Phoenix comments, and i will like to add that seeing this cases no wonder Publishers demand or force developers to go with the safetest route of yearly iterations, instead of creating new IP´s, the west and zampella situation comes to mind because one of the reasons, besides money, was the desire of starting working in a new IP, rather than doing MW3, among other things, therefore we gamers need to start taking this into consideration before demanding the bleeding tech on the next gens, and this add to the Epic comments regarding ps4/720 not being powerfull enough, iam seeing a trend here, and not a good one.

p.s: DSB something tells me that we are going in the wrong direction, when now making a game, a new ip in that, that is big and well polished, that one can argue if it´s boring or not, depending on the tastes, is a bad thing and a sign of failure, that is telling me we are going in the wrong direction as an industry, and as consumers of this industry.

You can tell people to ignore anything about a game, but ultimately the designers are responsible for every single thing they put in there. And if it’s in there, you’re meant to experience it.

They make it in it’s entirety, and I play it in it’s entirety.

If a car has a broken gearbox, you don’t just ask people to stop changing gears.

If there are sidequests, you’re meant to do them. If the developers mean for you to ignore them, they should make a mode with no sidequests. In Amalurs case, those sidequests also play a big part of everything from gathering gear to just crafting materials.

If indeed the game couldn’t be profitable at 1.2 million sold in less than 6 months, then I think it stands to reason that they probably would’ve been better off making a smaller game. That kind of loss certainly couldn’t be covered by expensive engines and graphics in this case. My guess is scale.

I am not too sure what game you played DSB, but KOA was a wonder to look at. Bright and colorful. Fantastic looking game.

I will take its visual and art styles over the washed out crap that plague most games today, with their mixture of mono tones and drab visuals anyday.

I also strongly agree with what Micheal and PB said.

Just wait for next gen, gonna be down right funny the prices are.

The entire model for biz in video games needs a rethink.

Thats why I like Nintendos way of thinking. Affordable hardware. Period. If you can’t afford to manufacter it and sell it w/o taking a huge loss per system, your doing it wrong. IMO. And look at what happens, PS3 and VITA say hi. There is too much tech in those boxes. It drove the prices up and hurt Sony.

Anytime your making a video game or a game system, your banking your future against a certian number of units sold. You have to cover costs. Rather simple really. And with actual games, you have to worry about used games. Like I said it was really a sad thing all of the way around.

Koa was an amazing game. Good story, great gameplay, huge world to explore, more quests then any game should have the right to have, vibrant and varried graphical settings, a nice crafting system, and very tight and fun combat. It got beat, dare I say, by Skyrims marketing. Alot of people I know are just now getting around to the game, and many of those are going to be used copies. And because of that, 38 studios loses.

And so do we, cause now action RPG fans have more of Elder Scrolls clumsy and painfull combat to look forward to.

It’s a game of oddities. On the one side, the gameplay itself is super-solid and really enjoyable to play. But the world it’s set in was so dull, it’s story so plain and poorly expositioned, that I felt absolutely no desire to continue playing after a while – I had no investment in anything going on around me. My character felt… pointless.

It’s not the most OMGMOSTSTUNNINGPIXELSEVAH game ever made, no, but a lot of people don’t seems to realize that what cost $200,000 about eight years ago (since you mentioned WoW) costs about $2,000,000 now. Obviously this are figurative numbers, but you get the point. The vast majority of that extra coat goes into the graphics.

I strongly believe if something like this had been released even half a decade ago on the popular formats it easily would have made a profit.

Nah, if it’s in there then *someone* is meant to experience it. Ultra-hardcore modes for example. Not for everyone, but there for some.

‘They make it in it’s entirety, and I play it in it’s entirety.’

Yet you don’t like where that takes you – why play a flexible game in a way you don’t enjoy? It’s meant to be possible to play in a lot of different ways, that doesn’t mean you have to. It’s a game, play it in ways you will enjoy it most.

Amalur failing to make a profit has nothing to do with how much they spent creating the graphics. Amalur was a game packed with content, most of which no one saw. It is a huge huge game, the sheer scale of the World, all that lore and level design. Thats what absorbed alot of the money.

Its entirely possible to produce a beautiful game without spending the Earth, Dear Esther looks fantastic, as does Trine and Amnesia. Completely different games of course but even The Witcher 2 is an amazing looking title and im pretty sure CD Projekt have made a profit from it.

I hope a lot of the people from Big Huge Games’s past and present make their way back to Microsoft, and then that someone will finally make another Rise of Nations/Legends game, as I suspect Microsoft still owns the IP rights to that franchise.

Game companies should never ever deal with Any USA Govt. In any form. It is the most corrupt ridden thieves guild on the planet. I bought this day one and me and the frost wife are enjoying it. Now I don’t want to buy DLC because I don’t want the State getting the money unless it can go to pay checks or health care. SAD

38 Studio got 75 million from RI. 38 studios spent it on making a New IP alongside of the MMo and in order to for the MMO to launch KOA had to do well which it didn’t. It did not make enough to break even. This is only the states fault because they gave a new start up company a fat amount of cash in order to bring jobs into RI much like Texas,California and Louisana did. You know all the main areas that games are developed in?

I mean, like others point out, even indies are looking gorgeous these days. Great graphics aren’t limited to AAA by any stretch of the imagination. Look at CD Projekt Red with the Witcher 2 or City Interactive with Ghost Warrior. Not exactly major operations.

I’m sure that tech doesn’t sell for nothing, but I think it’s how effectively you apply it that really makes a difference, in terms of making ends meet.

There’s nothing about Amalur that makes me think they broke the piggybank in any way. The gameplay is basic, the graphics are basic, and there really aren’t any physics to speak of.

I definitely think the fact that you have a new, untried studio trying to make a gameworld the size of Siberia, and then having to fill all that up with stuff, has everything to do with 1.2 million being too little to stay afloat.

At least to my mind, even with the best and brightest in your talent pool, they still have to work as an efficient team, together with middle management that is going to be just as new on the job. That’s not easy. A sports team with the best players isn’t worth shit until they have experience playing together.

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Kojima Productions will unveil something about Metal Gear Solid 5: The Phantom Pain this Wednesday. Metal Gear Solid fans should standby for a Phantom Pain-related announcement on Wednesday, March 4. According to developer Kojima Productions’ Twitter, there’s going to be an announcement at 2pm GMT on Wednesday. The developer posted the following image. The image […]

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Battlefield Hardline’s Premium membership will give players access to 4 new features, early access to expansion packs and more. EA detailed the offer today – it costs $50 in total (£40 in the UK) and gives players a whole bundle of new gear and content. Check it all out in handy list form below: Masks […]

Voice actor and Hollywood writer David Hayter discusses the differences between movies and games. And politely declines my leading question. “It might be fun to do a crazy, over-the-top film version of Saint’s Row.” Yeah, that headline is a bit cheap but you’re reading the work of a man who once asked the maker of […]

Microsoft has knocked up to £100 off Xbox One bundles in the UK. The Xbox One with Kinect Assassin’s Creed bundle is now £100 cheaper and comes with a free £20 voucher to be spent on the official Microsoft online store. Over on the Xbox online store there’s a £70 price cut on the white […]

Free-to-play 3DS title Pokemon Shuffle has been downloaded over 1 million times. As a reward for playing the match-3 puzzle game Nintendo has gifted players a Complexity -1 item for free. The item reduces the difficulty of a level, according to Eurogamer. By all accounts Pokemon Shuffle is a cynical game with poorly implemented microtransactions. […]

FrozenByte Games has revealed Trine 3, due for release in 2015 And what better way to reveal a new side-scrolling adventure than with a very pretty trailer full of gameplay? The latest in a series that has already sold 7 million copies is earmarked for PC and “other” formats. Trine 2 released on PS3, PS3, […]

A month since it was released on digital platforms, Dying Light’s physical release has topped the UK charts. Techland and Warner’s zombie survival game has proven to be one of the big hits of the year so far. It was released on digital formats a month ago but has only just been released on good-old […]

Think you can take down a jet plane with a grenade throw? This guy can. In fact, he can do it twice. This is in a variation on the player-created deathmatch “Stunters Versus Snipers” which seem to be all the rage in GTA Online at the moment. One team has a sniper rifle (and grenades) […]

The Phantom Pain looks nice even when Kojima just takes a quick pic with his phone. Look at that beauty. We get nice reflection in pink at the first gray of dawn.
pic.twitter.com/aERTBoZT9z — HIDEO_KOJIMA (@HIDEO_KOJIMA_EN) March 2, 2015 The game doesn’t have a release date yet, which makes us a bit nervous for it […]

Dying Light still has legs – maybe because it’s crammed full of secret things to discover. Ten of those have been highlighted by TerraMantis’ latest YouTube video, including reference to the Underpant Gnomes, guitar lessons, farting zombies and well, we don’t want to spoil it for you. Even if you think you’ve seen everything in […]

Why blind ‘em with science when you could kill ‘em with dance moves? revelations raid When I say Resident Evil: Revelations 2‘s Raid Mode dance gestures are deadly, I’m not being figurative. If you finish the first chapter of Revelations 2 you can unlock Gina for use in Raid Mode. All characters can use gestures […]

“Male Inquisitors can now scale the wall,” says a clever Redditor. A new Dragon Age: Inquisition mod removes Blackwall’s romantic restrictions, allowing male Inquisitors to chat up the fuzzy-faced warrior. Blackwall doesn’t have any race preferences, so you’re good to go there. Dragon Age: Inquisition romance mods are pretty common by now, and to be […]

Destiny players willing to faff about with their system clock can solo the Weekly Nightfall if they prefer. The Weekly Heroic is one of Destiny‘s toughest challenges. Responding to player feedback Bungie implemented matchmaking for the Weekly Heroic, but there are players who genuinely prefer to go it alone. There’s now no legitimate way to […]

A Clayfighter remake is inbound, apparently. Interplay has announced a Clayfighter remaster, combining the content of all past games into one package. Features include: Characters such as Bad Mr. Frosty, Blue Suede Goo, Earthworm Jim, Hoppy, Boogerman, Tiny – and more with over 20 characters total Over 20 familiar environments from the series to duke […]

Dying Light players! Are you sick of picking your way carefully up the sides of tall towers? Have I got a trick for you. The parkour system in Dying Light is okay, but climbing anywhere especially high can be a bit tedious. Enter Jesse Lester, who took a look at the tools available and worked […]

Destiny developer Bungie won’t stop tinkering with Exotic weapons. In Destiny, Exotic weapons are supposed to be the best of the best – and to feel unique. Guns like Ice Breaker and Gjallahorn definitely hit the mark there (although less so when everyone has one), but unfortunately, there are a few that just don’t strike […]

Uncharted 4′s first proper trailer bears some remarkable similarities to the opening moments of a much earlier Naughty Dog game. Uncharted 4: A Thief’s End has more in common with Crash Bandicoot than you might think. It’s Naughty Dog’s first game on a new console, yes – but if you compare Uncharted 4′s E3 2014 […]

Sonic Team leader Takashi Iizuka has said there are no plans to stop making Sonic games. Sonic hasn’t retired from the ranks just yet. “Please rest assured, I personally have no plans to stop making Sonic games for home consoles,” Iizuka told 4Gamer [Japanese]. The comment arose after the site asked if Sonic would become […]

Stealth Inc. 2: A Game of Clones will soon be available on PlayStation platforms, if a trophy list is to be believed. Stealth Inc. 2 initially launched as a Wii U exclusive, disappointing fans of Curve Studios’ tough action game. We’ve heard nothing to contradict this, but Exophase, a generally reliable source, has dug up […]

Runescape developer Jagex is working on something new. According to Jagex’s careers page, the developer has a new, unannounced game in the works. Its advertisement for a lead programmer makes explicit mention of an “undisclosed MMO”. The ad mentions the new title is in “the preliminary stages of redefining the cross platform MMORPG genre” and […]

Destiny developer Bungie has said it will change the way Crucible rewards work. Destiny players are always complaining about the perfidy of RNGesus, but there’s one area where it particularly hurts: the Crucible. PvP players often receive nothing at all for excellent performances, and sometimes Guardians receive the best drops merely for logging in as […]

Azure Striker Gunvolt is getting a sequel. Azure Striker Gunvolt developer Inti Creates has confirmed that the sidescroller has been popular enough to warrant a second instalment. The sequel will also be released on 3DS, the team said on Facebook. Very little information is available at present, unfortunately. “As time goes on we will have […]

Life is Strange developer Dontnod Entertainment has said the second episode is on track for release this month. I guess it would know. Life is Strange Episode 2 has been expected on March 13, but late last week Square Enix told Destructoid it had been delayed. Dontnod has since denied this report, describing it as […]

Job Simulator is the first game to be announced specifically for SteamVR, Valve’s virtual reality tech. Shoot Many Robots and Aaaaa! For the Awesome! developer Owlchemy Labs is the first team to put its hand up and say it’s worked with SteamVR. In a blog post, the studio unveiled Job Simulator, which will be playable […]

The first SteamVR announce is a headset a manufactured by HTC, the Taiwanese mobile company revealed over the weekend. Valve told us last week it planned to unveil virtual reality hardware at GDC, calling it “SteamVR” at the time. Now HTC has pre-empted Valve by revealing Vive, a headset developed thanks to a collaboration between […]

Sony Pictures Entertainment, 2K and Turtle Rock Studios have announced a tournament being hosted by ESL, which will see Evolve players take on newest movie robot, Chappie. The ESL has teamed up with Twitch for the live 4 on 1 competitive event, and you can watch as it all unfolds tomorrow, March 1 at 3pm […]

We haven’t heard much on Harebrained Schemes’ latest since it was announced in November, but today, the team has seen fit to release some interesting gifs of its a new project, Necropolis. Necropolis is a third-person action rogue-like with procedurally generated which can be “re-rolled mid-playthrough” and is headed to Linux, Mac and PC sometime […]

More Dragon’s Dogma Online screenshots have been released, and this batch is just as lovely as the last gallery we posted. Since this game will likely never leave Japan, the images are a bit of a salt rub for fans of the IP, but hopefully another entry in the series will be released at some […]

How would you like to become an agent of Death and rid the world of immortals? Then Death’s Gambit may just be the game for you. Announced by LA-based studio White Rabbit, the action-RPG with platforming elements tasks players with fighting gigantic enemies on an alien, medieval planet. Players will also encounter formidable beasts, knights, […]